Montana House District 55 Legislative Update
February 13, 2025
By Representative Brad Barker (Montana House District 55)
As of Monday evening, February 10th, we have just finished Legislative Day 26.
462 bills and resolutions have been introduced in the House and 300 in the Senate. 279 bills have passed to the second chamber. Significant legislation on the House floor for second reading over the past week included property tax reform, income tax reform, and Medicaid proposals.
The Republican Plan informed by the Governor’s Property Tax Task Force in House Bill (HB) 231 and the Democrat plan in HB 155 both passed second reading on floor moving to the House Appropriations Committee for debate. The Republican Medicaid expansion renewal plan that is contained in the Governor’s budget proposal also passed.
Property Tax Reform
HB 231 revises property tax rates with a three-tiered system for residential properties (0.9%, 1.1%, 1.9%) and a two-tiered system for commercial properties (1.5% under $1.9M, 1.9% above).
HB 155 implements a graduated tax rate system for residential properties (seven tiers ranging from 0% to 2%) and reduces the commercial tax rate to 1.4% on the first $200K.
Within residential property taxes, the major difference between HB 231 and HB 155 is where the tax breaks are directed. HB 231’s most significant reductions go to resident owner and long-term renter occupied homes to create “homestead” tax exemptions. HB 155’s most significant reductions go to housing below $500,000 and multi-family units “leased at 150% or less of the county fair market rent”. HB 231 shifts taxes away from residents to non-residents while HB 155 predominantly shifts taxes from low valuation properties to higher valuation properties.
I still believe that HB 231 best achieves residential property tax relief for Montanans while minimizing the impact on small businesses and agricultural across the highly varied tax bases in each county. This task is difficult because residential property now accounts for over 75% of property tax value in Montana while taxes from natural resource extraction and production continue to decline.
Income Tax Reform
Numerous income tax proposals and tax credits have been introduced. The leading Republican proposal in the House is HB 337. That proposal would reduce the top income tax bracket of 5.9% by .25% per year over the next two years to reduce it to 5.4%. It raises the bottom of the lowest bracket of 4.7% from $21,500 for single filers and $41,000 for married couples filing jointly to $70,000 and $140,000 respectively in Tax Year (TY) 2026. In TY 2027, that would increase to $100,000 and $200,000 respectively. This proposal would eliminate approximately $300 million in revenue going to the state general fund each year. I prefer this option which lowers everyone’s taxes instead of large income tax exemptions and credits for specific groups.
Medicaid HB 245
Debate on Medicaid continues with competing proposals to continue, eliminate or modify the Medicaid expansion renewal. I remain convinced that continuing the program with work requirements, premiums, and asset tests is the most fiscally responsible, least inflationary and sustainable for our rural healthcare infrastructure.
Medicaid is a complex program, and there is often confusion between Medicaid and the Medicaid Expansion implemented in Montana in 2015. Traditional Medicaid is limited to specific low-income groups like children, parents, elderly, disabled and pregnant women. Medicaid Expansion extends coverage to all low-income adults, aged 19 to 64, up to 138% of the Federal Poverty Level of $15,060 in 2024 or around $20,783 annually for a single individual.
Medicaid is jointly funded by states and the federal government under the traditional funding formula that is adjusted annually based on State average income compared to the National average. That rate is currently about 62% from Federal funding and 38% from the State. Under Medicaid Expansion, the Federal government portion is fixed at 90%. Pregnant women qualify for traditional Medicaid, but the Federal government covers 90% of the costs for that population in states with Medicaid Expansion.
When evaluating policy information and statistics, it is important to understand who is providing them, why they are providing them and how they got them. There are two useful Medicaid reports from the Montana Department of Public Health and Human Services and the State Auditors office that I have posted to my Facebook page if you want to take a deeper look. Over the past week, the Montana Freedom Caucus posted several inaccurate and misleading claims based in part on information from a group advocating for a Nationwide repeal of expansion.
That post claims, “64% of people on the Medicaid Expansion program in Montana do not work. Most are able but won’t.” The only way to arrive at that number is to include all the disabled and children on traditional Medicaid. Of course they aren’t working. Using just the adult population enrolled under Medicaid Expansion, around 66% are working and 11% are full time students.
Medicaid covers pregnant women with or without expansion. The Federal Hyde Amendment does not allow Medicaid to pay for elective abortions, but court orders have required Medicaid to cover “medically necessary” abortions. Their argument to eliminate expansion because, “your tax dollars are paying for abortions” is misleading. More of your State taxpayer dollars would pay for abortions deemed medically necessary if expansion is not renewed.
Disaster Readiness And Recovery
My HB 334, Generally Revise Disaster and Emergency Laws, passed to the Senate. That bill based on the interim study I initiated last session, addresses disaster and recovery preparation and recovery. It increases disaster appropriations by $3 million each year for planning, training, and validation of readiness. It will also increase State support for local financial administration and management of disaster and emergency programs to help speed up economic recovery. I appreciate the collaboration from the Carbon County Commissioners and Carbon County Disaster & Emergency Services (DES) to help put this together.
Please email, text or call with any questions or feedback. I am honored to serve you and remain committed to continuing to earn your trust.
